I have been a CPA for over 30 years focusing on taxation. I have extensive experience with partnerships, real estate and high net worth individuals.
My ideology can be summarized at least metaphorically by this quote:
"I have a total irreverence for anything connected with society except that which makes the roads safer, the beer stronger, the food cheaper and the old men and old women warmer in the winter and happier in the summer." - Brendan Behan
Nobody I work for has any responsibility for what goes into this blog and you should make no inference that they approve of it or even have read it.

Bill O'Reilly Likes Wealth Tax Idea Even Less Than I Do

A wealth tax is an idea that you will see floating around. Marc Lamont Hill was talking with Bill O’Reilly about the concept this week. The discussion got a bit heated

Usually my video clips just add a little flavor to the posts, but in this case I have to ask that you check out at least the first 40 seconds of this one. You will note that Mr. O’Reilly indicates that “Greeeeeen” Party candidate Jill Stein approves of a wealth tax, illustrating the point with a brief clip of Doctor Stein discussing the wealth tax. Here is a longer version of the same clip

Yes. “Cousin Bill” used my interview with Doctor Stein without crediting me. That really doesn’t bother me very much. I am always ready to help out a probable relative, but it is very troubling that he did not give any credit to Interlock Media. The crew from Interlock was an integral part of my first foray into the interview game.

I noted that the wealth tax was part of the Green Party’s platform, so that was one of the things that I asked Doctor Stein about. She indicated that although it was in the platform, it was not a focus of her campaign. One of the problems that “Cousin Bill” had with the wealth tax is the same problem that I saw. How could it possibly be administered without becoming overly intrusive ? Doctor Stein’s answer, in effect, was an indication that what she, if not the party, is really in favor of is an “intangibles tax”. Florida had an intangibles tax until a few years ago. Someone came up with a dodge around the tax using trusts. It was so easy that some people said letting your client pay Florida intangibles tax bordered on malpractice. Rather than plug the loophole, Florida repealed the tax. An intangibles tax would not be that hard if you limited it to publicly traded securities. Stock in closely held companies create difficult valuation issues. A “wealth tax”, in principle, calls for you to value all your stuff, which would be quite a project each year.

Marc Lamont Hill tried to explain some sort of simplified formula that is used to cut down the complexity, but he was unable to get it across. “Cousin Bill” indicated that a wealth tax would be unconstitutional because it involves seizing property. I’m not sure I understand what he was getting at. Taxes are usually paid in money based on some sort of measurement. Presumably with a wealth tax you would do some sort of computation like this one from Pakistan and then pay based on the computation. A wealth tax might violate the Constitution, but unfortunately, Bill did not indicate why he thought it would. Maybe it is self-evident, but it would be nice if he had indicated a section. The estate tax is, in effect, a one time wealth tax and is presumably constitutional.

I am going to study the Hill segment more closely so I can learn to do interviews. I naively thought that you should come up with a pretty good question and then kind of listen to what the interviewee said. Apparently what you need to do is to continually interrupt them and tell them that their ideas are ridiculous. Live and learn.

Are We Related ?

Bill and I have the same last name. Of course, his family apparently decided to keep the patronymic form, while my great-grandfather, Jeremiah chose to drop the “O”. The name Reilly is proverbially associated with wealth, one of the possible explanations for the phrase Life of Riley

This may account for Bill and I both having a negative reaction to the wealth tax. Further evidence of a possible distant relationship is that the name “William” is quite popular in my family. My grandfather, whom I never met was William. My favorite uncle and one of my first cousins were both “Williams’ who went by Bill. My son is also named William, although everybody calls him – well – William. Evidence that points in both directions is that Mr. O’Reilly’s family lived, for a while, in Fort Lee, NJ which is adjacent to Cliffside Park where my Nanna Reilly lived. Since he never showed up there on Sunday afternoon, an absolute requirement for close relatives, the relationship would have to be remote. I should also note that Reilly is rather a common name. Reilly is common enough that there are multiple people named Peter J. Reilly. As this google image search demonstrates, I may well be the most famous, if not the best looking.

Thanks To Bob Baty

I don’t watch the O’Reilly Factor but my most reliable commenter Robert Baty, a retired IRS appeals officer, does. He noted the Jill Stein clip and let me know about it.

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“From this side of the monitor, if you will make full disclosures regarding your tax matters, I will be glad to consider how far my comments might find application to your specific situation.”

I work a blue collar job, and have done so for 38 years. For 2012, my wages will be a bit above 30k, for the last few years a bit below 30k, but 30k is close enough for this discussion.

The 40% contribution to my 401k drops the taxable part of my wages down to 18k. Interest is an insignificant part of my income, not an uncommon situation these days. Dividends account for about 25k, maybe a bit more since so many companies are declaring special dividends this year. Cap gains will probably account for a few k this year, as I some times sell calls on my stocks. As a director, I receive <10k fees from my sub-s investment.

It is that sub-s investment that pushes my income over that magic 250k mark. It is hard for me to see how that is a "game".

Bob, (May I call you Bob, Peter doesn’t seem to take offense to me calling him Peter, and I don’t mind if you call me Bill. Both my father, grandfather and brother were named Bob,(or, Robert, anyway).

Anyway, Bob, if you don’t mind me saying Bob, I am not sure about what you are trying to say. If you are upset because I have had some degree of success in my life, (and locally, some people are), well then the only thing I can do is give you suggestions about what you can do with yourself and your camel. (Not picking on camels, it just seems to be a popular expression these days).

If you don’t like the current laws regarding sub-s income, I can only suggest you contact your congressman.

If you ever find yourself in Lewisburg, Kentucky, I will gladly drive you 10miles south and buy you dinner, where we can discuss these differences.

As far as an apology for how I make my income, no, that is not happening. Many people complain about how I live my life, but my taxes are in order, and that is all that matters. If you don’t like the current tax laws, contact your congressman. I am not changing my behavior because some one does not approve of legal and moral tax behavior.

I don’t recall you saying anything about how you make/made your money.

I am not upset; just trying to be conversational regarding these important, public issues that you have thought to personalize while trying to keep your secrets.

The merits of the tax laws regarding Sub-S beneficiaries is an issue quite distinct from the tax-evasion affected by those who exploit them quite successfully (in my opinion).

I lack sufficient information to form a conclusive opinion on such things as they might apply to you personally.

Kent Hovind claims his taxes are and always have been “in order”. I didn’t/don’t believe him. You are welcome to try and further personalize these matters, but I would not recommend it. You are on the losing end of this conversation.

France has a wealth tax which was just jacked up by comrade Francois Hollande. It is a nightmare to administer (how do you value illiquid assets like paintings or real estate) and everyone is cheating big time, including Hollande himself who was caught grossly undervaluing his real estate holdings. Incorporating oneself (the French equivalent of your Florida trust trick) has been used by billionaires to avoid the tax, so in the end it affects millionaires more than billionaires. The wealth tax should be left to communist ideologues, not tax collectors looking for efficient mechanisms to raise money.